TBY talks to Ifie Sekibo, Managing Director/CEO of Heritage Bank, on the importance of personnel, leadership, and the diversification of the Nigerian economy.

Can you give some background into Heritage Bank's operations and major achievements?

We looked at the business foundation of Nigeria when forming Heritage Bank and developing our business model, and observed that no family-owned Nigerian business had successfully transferred local ownership beyond the second generation. The complete business life cycle of Nigerian businesses was only three generations: the first started operations, the second oversaw the decline, and the third buried the business. We asked ourselves what we needed to do differently to correct this and allow Nigerian businesses to thrive from generation to generation. We saw that if we could show that generational banking is the bedrock of economic development we could have a real impact. Among small and medium-sized enterprises (SMEs) in Nigeria, there has been too much of an individual focus, rather than a holistic or intergenerational focus. There is not enough focus on partnership among Nigerian SMEs and this causes ventures to fail. We need to expand this mindset to allow the Nigerian economy to thrive in a sustainable way. Business leaders can create a powerful legacy this way. Our contribution to this effort has been to change the mindset of business leaders in Nigeria. We have emphasized the need for businesses to change their approach toward their ventures, starting with simple yet fundamental things such as ensuring that financials are in order, a board is in place, that risks are shared; and that proper governance mechanisms are in place. This is why we focus so much on technology. With technological innovation, we can drive business. We need to have partnerships; we need to train people. We have to think completely differently as the environment has truly changed.

What has been behind Heritage Bank's recent success?

Truthfully, it is our people. This business is about the next generation, the young graduates. We started a graduate training program where we take in recent graduates and put them in a six-month training program. They develop ideas and concepts that we had never considered, and that allows us to drive innovation from the bottom up. We want to instil in our people a recognition that it is not about short-term profitability but about creating a legacy. When people think about Heritage Bank, we want them to think about all the qualities that define who we are and what we do, and that process begins with having the best people. By extension, this means that strong and visionary leadership is paramount. Every week we discuss leadership and the things that matter when serving people. We perceive our customers as only those who have accounts with us. We view everyone as potential customers and we treat them accordingly.

What are Heritage Bank's expansion plans?

Our philosophy does not rely on traditional banking metrics like growth in the number of accounts. It is based on how many businesses we can help develop in the next three years. We want to help develop these companies to the point where they are able to be publicly listed on the primary and secondary markets. We want to put businesses in a position to thrive, and from this our account numbers will increase. In the next five years, we want to see our clients develop from SMEs to being publicly listed on exchanges. We invest in companies that have ambitious visions because we want to see them develop into large and thriving firms that can bring transformative development to Nigeria. We work with our clients to develop plans tailored to their specific growth needs. If we facilitate the success of our clients; then, we are succeeding, and this is my key measure of success. This is not a conventional approach for a bank. Of course, we recognize the importance of sound business fundamentals; however, if we can help our customers develop, then we can be stronger and more profitable. We do not place money first but our customer because this is, in the long term, the best investment.

In the long term, what will Heritage Bank's contribution be to the economic diversification of Nigeria?

Our contribution to the health of Nigeria's financial sector will be long lasting. I recently pledged my support to the government's program on deforestation, because if we do not take care of the earth, the earth cannot continue to take care of us. The connection between planting trees and banking is not obvious at first glance; however, they are quite connected. The desert is encroaching in the north of the country, and if we do not plant trees and replace our forests then we will lose valuable and important land. There is also a cultural dimension. Most people relate forests with culture, and in our culture we are dependent upon our land. As a bank, if we provide our customers, SMEs, with good training then we will benefit greatly in the long run. We want to see the connection between business ventures and Nigerian society. When SMEs begin to understand that a simple change in their business model will both positively impact their businesses and the earth, then we can make businesses more profitable and sustainable.

What are your expectations for the year ahead?

I am extremely optimistic. We came down from 7% growth a year ago to 2% growth and we will finish the year with somewhere between 3-3.5% YoY growth. This will be because the government has showed significant leadership in terms of tackling infrastructure issues. Infrastructure has such a large impact on business. We are also becoming much more efficient in terms of power consumption versus production. We have become more responsible in terms of energy use. By emphasizing efficient operations, we are reducing our energy usage and increasing productivity. I am certain that we will achieve much more in the years ahead and will see reasonable growth. In terms of the banking industry, we can easily climb above 15% growth; because technology helps us do business better. Our cost of doing business is shrinking. As more customers take advantage of our technology, our operations become more efficient; our operations and our profitability improves.